DBS Group Holdings share to hit $50 in 2023?

Is it a healthy correction or the start of a slippery slope? After announcing a record net profit of $8.19 billion for FY2022, DBS Group Holdings share price stunned the market by falling from $36 on 10 February 2023 to $34.70 on 15 February 2023. The decline represented a 3.6% in DBS Group Holdings share price within a week.

The volatility of DBS Group Holdings share price should not be attributed to the financial result of FY2022. Rather, the market should be rattled by CEO Piyush Gupta’s revelation of DBS loan exposure of $1.3 billion to beleaguered Adani Group, which has been targeted by short seller Hindenburg Research. The Adani Group is alleged by Hindenburg Research for stock manipulation.

To be fair to Piyush Gupta, the amount of loan issued to Adani Group represented only 0.3% of the total loan portfolio of DBS Group. Thus, the collateral damage should not be significant even if the full amount of $1.3 billion is write-off. But of concerning to most investors is how many Adani will DBS Group face in 2023 against the backdrop of a possible global recession?

DBS Group emerged victorious from the devastating pandemic as DBS Group Holdings share price smashed a record high of $37.25 on 11 February 2022. However, the series of US Federal interest rate hikes, coupled with the uncertainty from Ukraine-Russia war and COVID-19 lockdowns in China, had knocked down DBS Group Holdings share price to a low of $30 in July 2022. Since then, DBS Group Holdings share price managed to recover and started climbing to the current $35.

By right, banks should be the biggest beneficiaries from the interest rate hikes because of the increase in their net interest incomes. Yet the concern right now is whether the aggressive interest rate hikes could tip global economy into a long recession. In the face of a potential Singapore’s economic downturn, local banks will be the first in the line of fire. Due to this, DBS Group Holdings share price did not rocket despite consistently delivering great financial results for the past few quarters.

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Despite the headwinds, I must say the full-year financial result for DBS is nothing short of being spectacular. To put the icing on the cake, DBS is giving out final dividend of $0.42 a share and special dividend of $0.50 a share. This brings the total payout for the financial full year to $2.00 per share. In this article, I will do a deep dive on DBS Group’s financial performance and share my insights on the outlook of DBS Group Holdings share price in 2023.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in DBS Group Holdings share before. Whether DBS Group Holdings share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

DBS Group Holdings share price poised to surge?

The full-year earning for FY2022 amounted to $8.19 billion. With total outstanding shares of 2.57 billion, the earning per share is $3.1867 based on the current DBS Group Holdings share price of $35. As such, the P/E is about 11, which is not very demanding. For DBS Group Holdings share price to hit $50 in 2023, the bank needs to [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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